Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Friday, January 9, 2015

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’

I am off on my
first “business trip” of the New Year.To NJ, to attend the annual “Famous State Tax Seminar” offered each year
in Iselin by the NJ chapter of the National Association of Tax
Professionals.It is a must-attend seminar
for anyone who prepared NJ state tax returns.And then Sunday it is a bi-weekly payroll and then lunch and tax talk
with a friend from high school who is also a client.

“No matter what the H & R Block
commercials say, there is no magic wand that a tax preparer can wave to make a
bigger tax refund appear.

Your withholding and your tax credits control how large
your refund is – not some sort of magic worked by the preparer.”

Tax professionals
used to be able to work “magic”, and save tons of taxes, back in “the day”
(before TRA 86) using Income Averaging and 10-Year Averaging.But these “tricks” no longer exist.

The “magic”
provided today by a tax professional comes in knowing exactly what is taxable,
what is deductible, and what credits are available within a taxpayer’s specific
situation, and when and how to properly report these items on the tax
return.This comes from the preparer’s
personal knowledge of and experience with the Tax Code.No “box” (tax preparation software) can
perform this “magic”!

“The new rollover
rules don’t apply to taxpayers who make trustee to trustee rollovers from one
IRA to another IRA. But taxpayers who
withdraw money from one account and deposit into another account themselves,
will have to follow the new rules.”

“Did you entertain family and friends this
past holiday season? Generally, you can’t deduct any expenses for such social
gatherings. But you may be in line for deductions relating to business
entertainment—if you meet the strict rules spelled out in the tax law.”

* New twitter
follower Daniel S Bernstein, author of the blog AWESOME SECRETS, offers an “Ode to the Tax Code”.

Daniel admits -

“The truth is, I have fallen in love with the
tax code.”

I kinda know how
you feel, Daniel.I am not in love with
the Tax Code itself, in fact I think it should be totally rewritten from
scratch, but I did fall in love with tax return preparation 40+ years ago.

“Will the 114th Congress be able to overcome
such partisan bickering in order to craft meaningful tax reform?”

Kay, to be
perfectly honest, the answer is “NO”.

No “meaningful”
individual income tax reform is possible under the Obama administration.BO does not want “meaningful” individual
reform – he wants to continue to FU the Tax Code by maintaining and expanding
the bad policy of distributing government welfare and other benefits through
the 1040, specifically maintaining and expanding refundable tax credits.

I truly doubt that
“meaningful” individual tax reform will occur before I retire – although I can
continue to dream and to “campaign” for it.

THE FINAL WORD-

The tv ad asks -
Why would you want to do your taxes now with Jackson Hewitt?

Apparently not
because the Jackson Hewitt preparers are experienced and competent and will
prepare an accurate return, nor because they will make sure that you pay the
absolute least amount of federal and state tax possible for your situation.You should go to Jackson Hewitt because they
will give you a $50.00 bribe!

Chances are you
cannot actually do your taxes “now” – and even if you could you shouldn’t
prepare your taxes with Jackson Hewitt, or Liberty, or Henry and Richard, or
with any “fast food” commercial tax preparation chain.

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VERY IMPORTANT -

(1) Before contacting me with questions about how a blog post relates to your specific situation, please be aware that I do not give free tax advice to non-clients by e-mail, comment response, or phone. So don't waste your time and mine.

(2) I am winding down my tax practice, and I will not, under any circumstances, accept any new clients. Period. I am actually trying to "thin the herd".